Reference no: EM132637213

Problem 1: Make a cash budget for the months of January, February and March 1999 based on the data for:

View Receivable Trend:

1. 30% of Sales are collected in the month of sale
2. 30% of Sales are collected after the month of sale
3. 40% of Sales are collected two months after the sale is made

View Payable Trend:

1. 10% of Purchases are paid for in the month of purchase
2. 35% of Purchases are paid after the month of purchase
3. 55% of Purchases are paid two months after the purchase is made

Additional Information:

1. Rent and Insurance expense were prepaid at the end of 1998
2. All other expenses are paid for in the month they were incurred

November Sales = 195,000

November Purchases = 100,000

December Sales = 250,000

 December Purchases = 165,000

Problem 2: Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)